Contrast Firms End MRI Patent Dispute

January 19, 1994

Contrast agent developers Mallinckrodt Medical and Schering lastmonth settled a dispute over patents for chelate-based MRI contrastagents. The settlement is the third Schering has reached witha competitor over MRI patents: The German firm settled

Contrast agent developers Mallinckrodt Medical and Schering lastmonth settled a dispute over patents for chelate-based MRI contrastagents. The settlement is the third Schering has reached witha competitor over MRI patents: The German firm settled similardisputes with Sterling Winthrop and Bristol-Myers Squibb in 1992.

Mallinckrodt Medical received a patent in 1992 for a chelate-basedmethod of linking excess ligands to gadolinium molecules as ameans of stabilizing MRI contrast agents (SCAN 6/3/92). The methodprovides an extra margin of safety by preventing potentially toxic-freegadolinium from breaking off the agents. The formulation is beingused on an extracellular, nonionic gadolinium agent Mallinckrodtis developing, as well as on other agents in the company's productdevelopment pipeline.

Certain Schering MRI agents, including its flagship productMagnevist, are based on chelate technology and could have interferedwith the Mallinckrodt patents, according to James C. Carlile,Mallinckrodt Medical's group vice president of imaging. Mallinckrodtinitiated a patent interference proceeding to defend its positionon chelate-based technology.

Schering, however, also maintains a strong position in MRIpatents. Rather than slog through a potentially exhausting courtbattle, the two sides agreed to cross-license their patents toeach other, Carlile said.

"We found a business arrangement where we authorized eachcompany to use the other's patents in the development of MRI products,"Carlile said.

Schering has done well over the past two years settling patentdisputes out of court. Schering reached agreements with SterlingWinthrop and Bristol-Myers Squibb that allowed those companiesto make litigation-free product launches.

In exchange for settling with Sterling, which markets Nycomed'sOmniscan agent, Schering received a cash payment of an undisclosedamount and options for marketing rights on MRI contrast agentsbeing developed by Sterling and Nycomed (SCAN 8/26/92).

Coming to an accord with Bristol-Myers Squibb over its ProHanceagent brought Schering the marketing rights to Squibb Diagnostics'antiarrhythmic agent Betapace (SCAN 6/3/92).

Mallinckrodt's position was evidently stronger than eitherSquibb's or Sterling's. The agreement the company reached withSchering did not involved an exchange of cash or technology, Carlilesaid.

"I think (our dispute) was different in the sense thatwe had a position that could have been problematic from theirperspective, and likewise they had a position that we felt couldbe problematic from our perspective," Carlile said. "Eachhad something of value, and rather than try to battle it out inthe courts we exchanged values as part of this arrangement.

Mallinckrodt's chelate-based extracellular agent is in clinicaltrials. The Mallinckrodt agent that is closest to market, Gastromark,is not chelate-based and would not have been involved in the patentdispute. Mallinckrodt licensed the agent from Cambridge, MA-basedAdvanced Magnetics, which filed a new drug application for theagent in November (SCAN 12/29/93).